The Punjab government is considering raising the retirement age of its employees to 60. The proposal is likely to go up before the cabinet on July 23.
The salary, wages and pension bills are eating up a bulk of the state's revenue receipts. The primary motive behind suggesting increasing the superannuation age is containing the fast deteriorating fiscal health, even if temporarily. By the decision, the cash-strapped government hopes to save about Rs 1,000 crore a year.
If the retirement age is not increased, the government has to release post-retirement benefits running into multiple-crore rupees a year. "The increase proposal is under active consideration of the government," a top government source has confirmed. The finance department has cleared the proposal after consent from deputy chief minister Sukhbir Singh Badal and finance minister Parminder Singh Dhindsa.
The lukewarm response from the employees to the government's decision in September 2012 to offer a year's reemployment to all people retiring at the age of 58 has necessitated the move to up the age to 60 on union government the pattern.
In September 2012, the government had declined the finance department proposal to increase the retirement age from 58 to 60. Many employees, however, did not take the re-employment option and the government's hope of saving about Rs 1,000 crore was dashed.
The fiscal health is so precarious that every month, the government battles the overdraft problem. It borrows from market to meet its committed liabilities such as salary and pension, while the employees await long overdue instalments of dearness allowance (DA).
Rs 95,670 cr
outstanding debt: the burden has escalated with the government's borrowing from the market for the redemption of past debts and day-to-day needs
Rs 20,750 cr
salary, wages and pension bill: proving to be a huge burden on the state exchequer, eating up bulk of the state's revenue receipts
Rs 5785 cr
power subsidy: given to inefficient, loss-making power company for supplying electricity free of cost to farmers (irrespective of the landholdings' size) and poor families
Rs 20,000 cr
Value-added tax: Biggest source of revenue for the government and growing at an impressive rate but the scope for plugging leakages remains